CANADA VOLUME 135 S NUMBER 020 S 1st SESSION S 36th PARLIAMENT OFFICIAL REPORT (HANSARD) Friday, October 24, 1997 Speaker: The Honourable Gilbert Parent CONTENTS (Table of Contents appears at back of this issue.) OFFICIAL REPORT At page 1007 of Hansard, October 23, the following motion moved by Hon. Jean J. Charest (Sherbrooke, PC) should have appeared: That this House recognize the urgent need for action to address the serious problems in Canadian fisheries on both the Pacific and Atlantic coasts, and calls upon the government to establish a comprehensive national fisheries policy that demonstrates real commitment to resource conservation, leadership on the issue of resource sharing with foreign interests, and sensitivity to the individuals, families and communities whose futures are linked to the health and sustainability of the Canadian fishing industry. All parliamentary publications are available on the ``Parliamentary Internet Parlementaire'' at the following address: http://www.parl.gc.ca 1083 HOUSE OF COMMONS Friday, October 24, 1997 The House met at 10 a.m. I would remind my colleagues that on January 1 next year, just a couple of months off, under the North American free trade _______________ agreement, tariffs with the United States will be eliminated. On this side we share the concerns of business that a simplified customs Prayers tariff be ready for implementation on that date. Of course, this _______________ implies that business too must be ready. We have to preclude economic disruption, allow for automated systems to be adapted and employees to be educated to the new tariff structure. This is GOVERNMENT ORDERS why government has been working very closely with business to ensure that they are ready. D (1005) Since April Revenue Canada and StatsCan have undertaken [English] ongoing, extensive outreach programs with those affected. Offi- cials of the finance department have met with businesses and trade CUSTOMS TARIFF organizations and participated in conferences to inform interested Hon. Jim Peterson (for the Minister of Finance, Lib.) moved parties. Obviously, early passage would enable the government to that Bill C-11, an act respecting the imposition of duties of customs provide the information necessary regarding what is needed in and other charges, to give effect to the International Convention on terms of certainty, clarity and timeliness to the business communi- the Harmonized Commodity Description and Coding System, to ty. provide relief against the imposition of certain duties of customs or other charges, to provide for other related matters and to amend or Quick passage will also demonstrate to Canadian industry that repeal certain acts in consequence thereof, be read the second time Parliament is not only aware of market realities, but is also able to and referred to a committee. respond quickly and effectively to industry calls for legislation. Put simply, it is timely that Bill C-11 be enacted. He said: Madam Speaker, this is one of those occasions which rarely arises in this Chamber when all party consent, quickly given, Why? Because the current customs tariff represents a highly is in the interests of all Canadians. unnecessary hurdle to doing business. It is complex and outdated. It By simplifying the customs tariff, the bill will result in duty is time consuming and its redundant compliance requirements savings next year for Canadian businesses and consumers of $90 represent both a financial and opportunity cost to industry, not to million and will eliminate red tape. It will lower the production mention government and bureaucracy. We have to streamline it, costs for Canadian firms, increase competitiveness in domestic and simplify it and update it to make Canadians competitive at home global markets and create more jobs. and abroad. All of us know that Canada’s prosperity depends on trade. With rates of duty on all trade with our largest partner ending on Exports account for 33% of the gross domestic product and 29% of January 1, 1998, coupled with other real rate reductions and GDP consists of imports. If the costs of tariffs can be lowered for eliminations flowing from the Uruguay round of the World Trade Canadian businesses and administrative burden can be lessened, we Organization, it is important to simplify our regime by eliminating will have a more competitive job creating economy. This is why the complex and redundant mechanisms and ensuring that the tariff is government has worked closely with Canadian businesses to design responsive to competitive pressures facing Canadian industry. a more simple, cost effective customs tariff. Our regime has become truly complex. In all there are now 13 D (1010) tariff treatments, 7 schedules, about 8,500 tariff items and 2,500 Consultations were extensive. Letters were sent to the leaders of concessionary provisions or regulations and over 200 different the parties opposite from the heads of Canadian businesses and rates of duty. The system is complicated, lacks transparency and business organizations throughout Canada asking for their unani- leads, because of its complexity, to great uncertainty. This has mous support for these measures. They have asked that priority be been noted in many reports by the World Trade Organization. It is given by Parliament to passage of this legislation. imperative to minimize these costs to industry. Let us recognize 1084 COMMONS DEBATES October 24, 1997 Government Orders that it is not only in Canada but all around the world that tariff rates This initiative was the first legislative measure taken to simplify are going down. tariff provisions. I am very happy to say that it enabled business and consumers in Canada to save some $60 million a year. The Uruguay round, the FTA and the NAFTA have resulted in an almost 60% trade weighted reduction in average Canadian tariffs. The planned tariff reductions will benefit Canadian producers. The tariff system must be better adapted to the competitive What’s more, the administrative burden will be lighter—and Canadian industrial economy. In the context of an increasingly related costs lower—for both government and business. Finally, open economy, we have to have dynamic linkages between exports the Customs Tariff will become easier to implement. and imports, meaning declining rates of duty. This bill will replace the seven existing schedules with a single [Translation] one, simplify the tariff structure and greatly reduce the number of provisions in the Customs Tariff. The number of provisions will be reduced from 11,000 to 8,000. Moreover, obsolete or unnecessary For all these reasons, the February 1994 budget announced a tariff regulations and administrative procedures will be eliminated. thorough review of the Canadian tariff system over a three-year period. D (1020) D (1015) The new Customs Tariff will also have a broader application and permit unilateral tariff reductions for manufacturing inputs and the The main objectives were to ensure that the Customs Tariff and application of similar measures to the service sector. its regulations better reflect the pressures of international competi- tion and also to reduce the regulatory burden and all the related I would like, in this regard, to remind my colleagues of the costs. importance of ensuring that the Canadian service sector is as competitive as possible, especially in light of the international lifting of trade barriers in the service sector. We all know that the Accordingly, a working group was set up within the Department service sector is one of the most important ones in our country. of Finance and was mandated to achieve the objectives within three years. One of the key points of this review was its consultation of [English] all the parties concerned to ensure that the results of the review were in line with the objectives set. Until now I have spoken only in general terms concerning the overall economic benefits of simplifying our tariff structure. To Meetings were held in order to inform those involved of the illustrate these benefits allow me to turn briefly to several mea- measures planned and to seek their views. Following public sures in the legislation. consultations, a draft version of the simplified Customs Tariff reflecting public comments was issued in March 1996 to give I have already talked about the duty saving on a wide range of everyone an opportunity to prepare their final comments. manufacturing products. The legislation will make further reduc- tions in this direction, including the acceleration of most final Thus, in order to reach the greatest number of interested parties, Uruguay round reductions currently scheduled for the next two ads were published in a number of major Canadian papers, and the years. provisional version was displayed on the Internet site. As well, we are going to get rid of nuisance rates. Rates under The proposed legislation and letters of support from industry 2% will be eliminated. We are going to round other rates to the leaders received by the leaders of the opposition parties indicate nearest half per cent. These will be permanent features of our tariff that the consultation process was a success, since business supports system. the bill and is getting ready for its application. Rate reductions which affect goods coming into Canada that are used as inputs for manufacturing are very important. These will It is obvious the bill is based on the measures the current reduce the cost to Canadian manufacturers. It will make them more government has taken up until now to restructure and modernize competitive and better able to take advantage of the growing the Customs Tariff. We hope in this way to help our businesses regime of free trade. In short, our industries will be better able to become more competitive and prosperous. compete for jobs. In June 1995, Bill C-102 lowered tariffs on a broad range of Government red tape also stands in the way of our competitive- manufacturing inputs, so as to reduce the pressure exerted by the ness.